Week 6: May 6. THE RISING POWERS: CHINA, INDIA, RUSSIA.

New, and old, states pursue petroleum as competitors (or worse) of the U.S.

Competition and Conflict

• China, India and Russia are all moving into being strategic competitors and then on to conflict
• China and Russia and the U.S. are all jockeying to get into other countries to secure oil supplies

Russia

• Baku was the first mega oil field around 1900 and all the big names were there. After the Bolshevik revolution there was no great interest in the Soviets going to the Caspian because they would not be able to transport the oil so it became a ghost town.
• Siberia then became the oil region and Baku remained a ghost town
• Russia was a basket-case in the 90s but no longer
• Even though Russian population is decreasing, Russia is re-emerging as a dominant power
• Putin is just the latest czar that is re-developing the Russian national unity and re-ordering the country.
• He has imbued Russia with a modernized legitimacy and stripped away the ideology but re-centralizing the economy
• Always had a high rate of literacy and educational achievers
• In 1990 when the Soviet Union collapsed there was a lot of interest in the Western world to go back to the Caspian
• Russia has a huge amount of natural gas and has built a lot of pipelines to carry it. It provides 1/4 of Europe’s natural gas

Putin

• Putin got at the St. Petersburg College of Mining (the old Leningrad University)
• His 1999 PHD thesis regarding that right of the state to control natural resources which is necessary for a stable economy.
• He is intelligent and understands the importance of energy.
• No other leader emerged that had that had the same steel-will that Putin does
• Triumph of the state over powerful private interests
• Putin did the same thing as Ivan the Terrible who terrorized the boyars (?)
• Gazprom has been the main vehicle for breaking up the private oil companies
• Putin first target was Khodorkovsky, who was the wealthiest man in Russia and CEO of Yukos, an oil company, who also had some media control and was forming a political party. He was arrested on corruption and convicted in a kangaroo trial and was sentenced for 9 years.
• Putin then started consolidating government control of other private energy companies, including Gazprom
• They badgered western interests with environmental critiques. However, once the Russians achieved control, the environmental concerns disappeared

China

• Was a flopping giant after WWII
• In the 50s had the disastrous Great Leap Forward with backyard steel making and unrealistic crop yield expectations
• Under the charismatic leader Mao, was unhappy with being in the shadow of Stalinist USSR but had a Stalinist view
• The did a “stutter step” in the late 60s Mao implemented the Cultural Revolution which also was disastrous and so China spent the 70s eating itself up
• In 1978 Deng Xiaping declared policy of 4 modernizations. Didn’t have immediate results but had a tremendous impact on the policy of China
• West came in to provide them with great markets
• GDP: In 2004 China was 6th, 2005 jumped to 4th, and are now challenging Japan for 2nd spot and in 2020 is slated to be 1st
• China’s growth is incredibly visible because they are on a building spree of skyscrapers, highways, etc
• Country run by Politiburo and these firms are “dotted-line” extensions of the government which enables it to control these plans and operations to obtain more resources and energy in a much more efficient way. This is in contrast to the U.S. which has political and legal impediments to oil and resource exploration
• China has a lot of coal in the interior that they are using for electricity
• 3 priorities of energy policy:
  1. Diversify
  2. Be mostly dependent on energy sources reachable over land
  3. Use self-controlled business firms as a extensions of the strategic interest of the Chinese state
• China is very concerned about the U.S. Navy being able to cutoff the oil imports
• Every country that has developed rapidly has reached the point of environmental degradation where pollution because intolerable and they had to change course, but China hasn’t reached this point yet

India

• Had anti-colonial revolutionary country led by Ghandi
• Problem was it got divided in its creation forming Pakistan
• In the 1970s was very poor and some thought the country wouldn’t make it.
• Rajiv Ghandi (?) with the ruling Congress socialist party started privatizing slowly
• In 1999 the Congress party was finally defeated by BJP (?) and they further privatized. Even though they were only in power 4 years, when the Congress party regained power they didn’t re-nationalized.
• In 2004 GDP was 8th place, and 4th in purchasing parity
• Pretty far behind China in terms of growth and won’t be able to compete with them but are highly literate and are English speaking so are likely to catch up